Tsipras II: The shift to political responsibility

Tsipras II: The shift to political responsibility

What are the implications of this second SYRIZA-Independent Greeks (ANEL) government? Once more Prime Minister Alexis Tsipras chose to form a coalition with the right-wing populists instead of the pro-EU center/center-left parties of PASOK and Potami. Looking at his government’s composition, apart from a few exceptions, kind words are difficult to come up with. But the important thing is to look at the broader picture.

First, this mediocre Tsipras II government, better than the bad Tsipras I government, is the price Greece is paying for being spared Tsipras in the opposition. His first contribution should be to correct at least part of the damage he has already done, initially as the inflammatory opposition and then as a reckless government. And thanks to Tsipras not being in opposition, his government will enjoy greater political stability than any of the crisis governments before him.

Second, Tsipras is very fortunate, as long as he takes advantage of his good fortune. In contrast to all his predecessors, his government is the first to be elected with the pledge to implement (not tear apart or renegotiate from the start) the bailout program. The program was voted by five parties and 222 MPs in the previous Parliament, who have now risen to 258/300. The new Tsipras government will not have to sweat over policy alternatives, being surrounded by a tight framework of carrots and sticks that define his path up to the first half of 2016. He must apply the milestones and reforms for a timely and successful first review, because it will be only then the discussion of debt relief can begin, access to lower-cost Eurosystem liquidity and subsequent inclusion in the European Central Bank’s quantitative easing program can become possible, recapitalization can be completed on time by the end of the year to avoid a bail-in of uninsured deposits, capital controls can be phased out, and the productive process will be able to breathe again. Banks will finally be able to return to their role of financial intermediation from the simple payments system they have become, investment will flow in from the “Juncker package,” and the real economy will begin to recover, restoring a positive balance of job creation after the job losses of the last few months. Every failure in the above sequence comes at a glaring cost, and every small win can be politically capitalized. So this is after all a politically helpful framework. Finally, the Left Platform/Popular Unity (that dark realm of the radical SYRIZA unconscious, where infantile leftist desires and impulses reside) has been liquidated, failing to enter Parliament.

Third, Europe and the world, markets and investors, as the prime minister’s visit to the US demonstrated, are ready to reward Tsipras’s accession to pragmatism, eager to welcome the Lula of the Mediterranean. A committed implementation of conditionality and reforms can generate waves of positive expectations, translatable into inflows of investment, added value and jobs. Many left-wing leaders internationally found themselves in a similar situation of dissonance between their ideology and the surrounding reality, and had their own TINA moment, exclaiming, like Tsipras did last summer, “There is no alternative.” Socialist governments in Europe and the world did not open up to markets and sweet-talk investors because they were infected by the virus of revisionism. They followed their own middle-class societies, or tried to incorporate their economies into global value chains to bring home jobs and raise prosperity. They realized that in conditions of free capital mobility, socialism-in-one-country does not exist as an option, and adjusting to globalized competition is the only responsible choice. Tsipras’s shift to realism is the graduation to political responsibility; other socialist or left-wing leaders underwent the same when having to govern at times of intense globalization, let alone binding conditionality.

Fourth, international integration is one thing, social integration is another. Implementation of the bailout program by the left broadens the program’s social acceptance. The anti-memorandum/anti-austerity populism of SYRIZA-ANEL when in opposition, legitimized by New Democracy’s anti-memorandum/anti-austerity populism of 2010-11, has left a deep rift in society. Through his own populism in the 1980s, Andreas Papandreou ended up integrating the losers of the Civil War. Tsipras will implement the third memorandum in the name of his anti-memorandum electoral coalition, legitimized by the popular vote and the overarching pragmatic necessity to do what it takes to allow Greece recover inside the euro. By doing, so he symbolically integrates the losers of the great crisis, and bridges the division of Greek society under the three memorandum programs.

Five, all that notwithstanding, Tsipras can leave behind him a left imprint. He came riding the wave of international criticism to austerity, amid a Great Depression of 27 percent unemployed and an economy in steep disinvestment. The bitter irony was that his first government proved to be the least capable of creating conditions for a rise in the employment rate; quite the contrary, the record of Tsipras I is tens of thousands of new unemployed, following the capital controls imposed after June’s reckless referendum decision. Tsipras II can target social protection to the weak, break up oligopolies, and raise revenues by attacking corruption and tax evasion, especially the tax evasion of the wealthy and powerful. That requires administrative capacity which his government has not yet demonstrated, and political will which is still to be proven.

The Tsipras government is bound by an austerity program heavy on tax hikes and spending cuts, but also comprising significant growth-conducive reforms and flanking measures that can eventually deliver Greece to recovery and sustainable job-creating growth. There is no alternative to the sequence of stabilization, reforms, recovery, following the memorandum program track. But this is not the only potential outcome. The Tsipras II government can fail in many distinct ways: via ideological rigidity, political indecisiveness, administrative incompetence, or all together. Some in SYRIZA are nurturing the belief that revolution or “rupture” is simply postponed for a more propitious time, when the external constraints might be looser. It would be terrible if their ideological obsessions lead the country to relive the farcical negotiation of the Tsipras-Varoufakis period, this time as a tragedy of a predefined outcome. History will not be kind to them the second time round.

* George Pagoulatos is a professor of European politics and economy at the Athens University of Economics & Business.

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